Sun may be shining again on Madison Avenue Billings expected to rise in advertising industry

February 20, 1992|By Thomas Easton | Thomas Easton,New York Bureau

NEW YORK -- It isn't the kind of bold message the advertising industry tends to favor, but there are some subtle signs that the industry's visit to purgatory might be ending.

Philip Geier, chief executive of the vast Interpublic Group, which handles advertising for Coca Cola, General Motors, Unilever and RJR Nabisco, among other accounts, said yesterday that overall industry billings should expand about 5.8 percent this year after contracting about 1.5 percent last year during one of the worst slumps since World War II.

Mr. Geier's speech to the New York Society of Security Analysts drew a number of portfolio managers whose interest in advertising was premised on the notion that the industry might be a leading indicator for the rest of the economy.

Advertising spending for the first quarter, historically the slowest period, remained unusually sluggish, Mr. Geier said, but compared well with last year's first quarter, which was torpedoed by the Persian Gulf war.

Preliminary commitments are up for autumn advertising in magazines, a group that was devastated by last year's tough conditions.

Other indicators for industry prospects that Interpublic watches closely, such as institutional food sales, also have begun to rise.

"We are reviewing clients' budgets, and we are seeing increases in their advertising spending levels," said Roger Gray, chief executive of Gray Kirk/VanSant, a Baltimore firm whose clients include Martin Marietta, Westinghouse, Choice Hotels International, Corestates Financial Corp. and Jiffy Lube. "But if I had to put a number on overall growth, it would be 3 or 4 percent."

Several newspaper companies have reported increases in advertising linage but the gains are not widespread. Indications -- rather than suggestions -- of a rebound remain scarce.

"For every one I see that is improving, I see one that isn't," said Alan Gottesman, an industry analyst at PaineWebber. Widespread "improvement will emerge later, but it's like when my kid tells me he'll clean up his room later. Eventually, he will, but who knows when?"